AUD/USD: 0.7715EUR/USD: 1.1320It has been another generally choppy session, with event risk from the Greek debt discussions being the key focus. Traders remain cautious of taking too much risk ahead of any definitive outcome from the current round of talks and this is likely to continue, although today we also get some important economic data to provide some direction. The German CPI and the US Retail Sales will be the main events of the day, but those aside, the BOE QIR will also be released. Before then the Australian employment data and the NZ Business PMI are due to be released. There is also an EU Meeting so watch out for any soundbites coming out of that.
After an early squeeze to 0.7793, the Aud has been under pressure for most of the session today, (not helped by an analyst support suggesting that the Aud is heading to 0.6800), falling to a low of 0.7693 as the market eyes the probability of unemployment rising to 6.2%. Jobs created are expected to rise by 5K, while the participation rate is expected to remain stable at 64.8%.
Although the Aud does look heavy once again, until the recent trend low of 0.7625 is taken out, we could well be in for more of the choppy consolidation of the last few days. A decent outcome from the jobs data would quickly see the Aud back towards 0.7800, so some caution is warranted on the downside, although I am carrying a core short position, looking to add to it into any decent rally. Patience needed!
Below today’s low will meet support at Fibo support at 0.7685 (76.4% of 0.7876/0.7625), which is also the base of a short term channel. A break of this will head back towaqrds 0.7625, below which could see the Aud on its way to lower levels, initially supported at 0.7600, but below which, we are looking at the RBA’s stated target at 0.7500. Under there, there is little real support for the Aud until the next major Fibo supports to be seen on the monthly chart (below) at 0.7204 and then at 0.7183 (76.4% of 0.6006/1.1082 and 61.8% of 0.4773/1.1082). If/when seen, this area should be extremely strong support.
On the topside, minor resistance is seen at 0.7730 and then at 0.7750, above which would head to the 200/100 HMA’s at 0.7785/95. Above here, which would need a very good employment number, would head back to 0.7800 and then possibly towards the session high at 0.7841, although this currently looks unlikely. If wrong, above 0.7850 would head towards Friday’s top at 0.7877. Above here, we could be in for a run towards 0.7895 (23.6% of 0.8794/0.7625) and then to the 50% pivot of 0.8230/0.7625 at 0.7925, above which could then see a run back towards the Fibo resistance at 0.7995 (61.8% of 0.8230/0.7625).
I think the overall bias will remain to the downside, but whether the Aud is ready to resume the greater downtrend is questionable given the oversold nature of the daily charts. We shall see.
RBA Deputy Governor is speaking this morning at the FXWeek jamboree that is going on in Sydney, so keep an eye out for an attempt to talk the Aud towards the RBA's 0.7500 target.
Economic data highlights will include:
Consumer Inflation Expectation, Employment data RBA Debelle Speech
Jim LanglandsFX Charts www.fxchartsdaily.com
